Capitalism

Capitalism emerged with the advent of industrialization. Capitalism is defined

as a system of production whereby business owners (capitalists) produce
goods for sale in order to make a profit and not for personal consumption. In
capitalism, capitalists own the business including the tools used for
production as well as the finished product. Workers are hired in return for
wages, and the worker owns neither the tools he uses in the production
process nor the finished product when it’s complete. If you work at a shoe
factory and you take home a pair of shoes at the end of the day, that’s
stealing even though you made them with your own hands. This is because
capitalist economies rely on the concept of private property to distinguish
who legally owns what.

Capitalist production relies on the market for the allocation and distribution of

the goods that are produced for sale. A market is a venue that brings
together buyers and sellers, and where prices are established that determine
who gets what and how much of it. The United States and much of the
developed world today can be described as capitalist market economies.

Capitalism Alternatives
Alternatives to capitalist production exist. Two of the most significant ones
developed in the 19th century as a response to what was seen as
capitalism's abuses.

Socialism is a system of production whereby workers collectively own the

business, the tools of production, the finished product, and share the profits
– instead of having business owners who retain private ownership of all of
the business and simply hire workers in return for wages. Socialist
production often does produce for profits and utilizes the market to distribute
goods and services. In the U.S., worker co-ops are an example of socialist
production organized under a broader capitalist system.

Communism is a system of production where private property ceases to

exist and the people of a society collectively own the tools of production.
Communism does not use a market system, but instead relies on a central
planner who organizes production (tells people who will work in what job)
and distributes goods and services to consumers based on need.
Sometimes this is called a command economy.

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